Implementation of WTO rules on textiles criticized
JAKARTA (JP): Developing countries in the Asia-Pacific region have been disturbed by a virtual backslide by the developed countries in implementing a multilateral agreement on the trade of textiles and clothing.
Adrianus Mooy, the executive secretary of the Economic and Social Commission for Asia and Pacific (ESCAP) -- a United Nations body -- said here yesterday that there was widespread criticism of the way the agreement was being implemented.
"There was a general feeling that the first phase of the integration program has been rather unsatisfactory," Mooy said at the closing of a three-day meeting of senior ESCAP officials.
The agreement on textiles and clothing is part of the World Trade Organization's (WTO) built-in agenda for further liberalization.
The agreement is designed to integrate textiles and clothing into the WTO's coverage so that by the end of its transition period in 2005, the WTO rules will apply to the whole textile and clothing industry.
The first stage of integrating textile and clothing into the WTO should have occurred in the first 18 months of the agreement's implementation, starting Jan. 1, 1995, under the supervision of a textiles monitoring body.
"The textiles monitoring body has been largely ineffective in stopping a virtual backslide," Mooy said.
He said the virtual backslide by developed countries occurred because there were insufficient rules.
It is expected that developed countries will maintain their non-tariff barriers, certainly until 2005, to restrict textile imports from developing countries to protect their own mature industries.
These non-tariff barriers include resorting to transitional safeguards, unilateral changes in the rules of origin, new restrictions arising from regional integration and ignorance of commitments in quota growth rates.
Although articles 2 and 3 of the agreement on textiles and clothing require all members to progressively phase out all restrictions inconsistent with the WTO, article 6 of the agreement permits the introduction of new quantitative restrictions by all members on products which have not yet been covered by the agreement.
The United States, for instance, has enforced a new set of rules of origin on the import of a wide range of products, from T-shirts to pants, since July 1 this year. The introduction of new rules of origin have angered many textile exporting countries, including Indonesia.
"The implementation of the agreement cannot yet satisfy all the textile and clothing exporting countries... They have not felt any significant impact from the liberalization process in the sector in the last two years," the chairman of the meeting, Soemadi D.M. Brotodiningrat, said.
The purpose of the three-day meeting here was for ESCAP members to exchange views and prepare the way for the first WTO ministerial meeting in Singapore in December.
Concern
Soemadi said the textile and clothing industry now had a regional perspective because the countries in the ESCAP region were now the largest and most dynamic textile and clothing exporters in the world.
He contended that some countries in ESCAP, like Pakistan with 60 percent of its non-oil exports being textiles and clothing, have expressed concern.
"If the textile and clothing sector has not been addressed in the last two years, what do they get out of joining the WTO," Soemadi said.
The region now accounts for almost 60 percent of the world's textile and clothing exports, for almost 60 percent of world's exports to North America and for more than 40 percent of the world's exports to the European Union. At the same time, the Asia Pacific region heavily relies on North America and the European Union as markets. The agreement on textiles and clothing is of great importance to the region.
The textile and textile-related industries of Indonesia are one of the country's largest foreign exchange earners with an annual export value of around $6 billion.
Mooy said the upcoming Singapore meeting should not be overloaded by new issues but should focus on reviewing the implementation of WTO agreements.
"Participants felt that the Singapore ministerial conference should reaffirm commitments to implementing the agreement faithfully, and concrete steps should be taken to strengthen the textile monitoring body as an instrument of liberalization of this sector," Mooy said. (rid)